WPP Insight Revenue Stalls as Group Plans Return to UK

WPP has reported revenue up just 1.2% to £1.19bn in its consumer insight division in the first half of the year, while headline operating profit fell slightly to £84m. The group has also confirmed that following tax changes, it plans to move its HQ back to the UK from Ireland.

For the second quarter, consumer insight revenues fell to £622m from £625m in the prior year period, but like-for-like revenues on a constant currency basis rose 0.8%, compared with 1.3% in the first quarter.

Revenues in the 'faster growing' markets of Asia Pacific, Latin America, Africa, and Middle East were up ahead of the first quarter, but the US, UK and Western Continental Europe regions 'softened', the Group said.

In the US the custom research business within TNS, Millward Brown and Added Value, and the call centre operation, were the most affected. Reported operating margins slipped 0.5 points to 7.0%, which WPP says was partly due to client pricing pressure; additional re-structuring severance in the US, the UK and Western Continental Europe; and 'significant' technology investments.

Overall the Group reported a 5.5% increase in like-for-like revenue in the first half to £4.97bn from £4.71bn in the same period last year, and a 7% rise in pre-tax profits to £357.7m.

CEO Sir Martin Sorrell (pictured) confirmed that 2012 has started reasonable well, with a strong first quarter and slightly slower second quarter. 'As a consequence, our operating companies are hiring cautiously and responding to any geographic, functional and client shifts in revenues,' he added.

Separately, WPP says it is planning to move its HQ back to the UK from Ireland, following the government's decision to cut corporation tax on foreign profits earned overseas.

Sorrell re-located WPP's tax base from London to Dublin in 2008, to avoid paying tax on the group's 'foreign profits'. Ireland currently levies a 12.5% corporation tax rate, which is less than half the British rate. However, the UK coalition government has now put in place legislation covering the taxation of foreign profits from 2013, which means the move back will carry no tax cost for the Group.

Web site: www.wpp.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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